ispONE Cancels Telstra Contract, Calls In Administrators

Remember when we said it’s the beginning of the end for cheap MVNOs like AldiMobile and Kogan Mobile? Turns out that the race to the bottom has well and truly begun, with Telstra now confirming earlier reports that ispONE has canned its contract with the telco. The all-out fall-out has begun.

The Australian Financial Review has just reported that ispONE has canned contracts with Telstra, essentially leaving Kogan Mobile and AldiMobile up a river without a boat, let alone a paddle. Telstra has this afternoon confirmed as much and we have reprinted its quite lengthy statement in full:

Telstra Wholesale has been advised that ispONE has appointed Ferrier Hodgson as a voluntary administrator and the administrator has cancelled ispONE’s contracts for the supply of Telstra Wholesale pre-paid mobile products.

Telstra Wholesale has entered into an interim agreement with Medion Australia for the supply of wholesale prepaid mobile services. Medion is the supplier to ALDIMobile.

ispONE had been a customer of Telstra Wholesale for mobile products as well as a broadband and a relatively small number of fixed line voice products. ispONE on-sold these products and services to retailers and in some instances to the public. For example, ispONE supplied two companies, the online retailer Kogan and Medion (who sells mobile service through the ALDIMobile brand), utilising the Telstra Wholesale pre-paid mobile product.

Telstra Wholesale Group Managing Director, Stuart Lee, confirmed that given the relationship with ispONE for pre-paid mobile services had ended, Telstra would not be accepting any requests for new Kogan Mobile services from ispONE, although people with existing services would have the opportunity to switch to other providers.

“For mobiles, we will not be accepting new activations, number port-ins or processing credit recharges from ispONE on behalf of Kogan Mobile. An interim service will be available for a fixed period of time for people who have active pre-paid mobile services from Kogan Mobile so they have time to choose their next steps,” said Mr Lee.

“Because Medion and Telstra Wholesale have been able to negotiate a direct supply agreement there will be no changes to the services for ALDI Mobile.

People who have services through ispONE and its retail partners, such as Kogan Mobile, are not customers of Telstra.

“We do not have their account information and we cannot provide them any customer service support. For any questions about their service, people should contact their retail service provider,” said Mr Lee.

There are limits to the industry’s capacity to implement mobile number porting requests and requests to churn fixed line voice and broadband services. If large numbers of people try to switch providers at once there may be some delays across the industry.

“People who want to change providers should approach their service provider of choice who can request the number port, but we would ask for patience as there are limits on how many ports the industry can undertake in addition to normal sales and activation activity. To provide for a smooth transition we are providing interim voice services across the impacted mobile and fixed line services.”

Kogan Mobile had no comment, AldiMobile was unreachable for comment, as is ispONE.

It’s unclear as yet what this means for Kogan Mobile or AldiMobile customers, but it’s fair to assume that service interruptions can be expected, at least on Kogan Mobile.

Feel sorry for anyone that got shafted with Kogan. This is why I would never trust a cheap reseller for my phone account. Its too important to me to have a reliable and consistent service I can always depend on (even if it does cost twice the money). I hate having to be to a Telstra customer as their prices are horribly high (and their data allowances pitifully low) but their network coverage, reliability and consistency of service are miles ahead of the competition.

The service through ispOne on Kogan was actually very good.
Identical to the regular Telstra network ecxept you didn't get the 4G or 3.5G (3G+ or whatever) data speeds; but since you got 6GB of data, it was great value for $30.
And even with Aldi for $35 you get 5gb, it's still more than half of the price of full Telstra network; and If you don't need those speeds, then it is a great deal.

The crazy thing is that Kogan has actually upheld its end of the deal. It paid ISPone exactly what it was asked to. It's ISPone who is at fault here, they signed a contract with Telstra and then offered dirt cheap prices to Kogan/Aldi etc and then weren't able to pay the Telstra bill.

I should have put ISPOne instead of Kogan as there's no question they are at fault here. The point I was making is that I can't take a risk with any 3rd party resellers or smaller providers for exactly this type of reason. My business depends on my phone being always available, but I can see how this deal was appealing to those without that strict requirement, and for those wishing to save cash, as I pay an arseload for my Telstra account. I don't mind paying extra for quality either, I just resent the tiny data caps that Telstra have available even for high paying customers.

Yeah, I think in his eagerness to get the article posted, Mr Hopewell didn't read the statement thoroughly enough...

Insomniac, the service supplied by Aldi (and previously Kogan) is Telstra networks - a consistent and reliable service. I am with Aldi (phew!) and am enjoying almost exactly the same phone service as I did when I was with Telstra NextG, but at a greatly reduced cost.

I did try Kogan earlier this year, and their customer service and backoffice processes were terrible.. so I moved my wife and I to Aldi a couple of months back and have been very pleased. Aldi/Medion are a much larger organisation, and they have the resources to provide a better level of customer support.

Great, Im about to loose out on my Kogan 365 plan, I have no idea if I will be cut off and no idea if I can port my number.
Now im wondering if going to a smaller reseller will be worthwhile.
anyone know anything about Vaya or Live Connected?

Yeah, I know that, but I was saying they hold us up for ransom for internet. As for phones, they're being dogs as well. Dodo is cancelling their prepaid as well. Something very fishy is going on. All of a sudden prepaid plans from everyone is shutting down. Soon, we will have to pay 60 a month and only get 2mb of data on our phones. The government should look into this. I know Telstra is getting upset with the nbn roll out, and they have a deal going with the liberals to make sure everyone still has to use their copper lines so they can charge whatever they like. Telstra is dead against fibre to the house because this cuts them off completely from the equation.This is corruption at its highest level.

I agree. There are a lot of things coming together. so many of these lower cost providers all shutting down not long after one another. To me it speaks of massive underhand dealings by Telstra, Vodaphone, and Optus.
Maybe they've seen that these lower cost services are hugely popular and are afraid that it'll open up real competition and start eating into their main market so they've moved to kill them off in a semi-legal way instead?

We were moving towards the sorts of services they had in the US, Europe, Asia... Now we're going back to the third world overpriced crap our country always gets stuck with.
No matter what people do to try and move us ahead, greed and short sightedness always takes us back 10 years behind everyone else. It's embarrassing.